Friday, November 30, 2012

An insightful post
about Monitor’s failure on Steve Denning's Forbes blogs spurred
thought-provoking discussion, which means, strategy planning is still one of
critical management activities in modern businesses today; also because Monitor
is a strategy consulting firm co-founded by strategy master Porter, surely
such discussion is not for gossip, but for brainstorming the strategy in strategy making, and learning more from failures with humility.

Strategy
Framework is like recipe, not a dish, there are two phases in strategy
formulation: the first is carpentry: swot, pest, 5F, etc. The output is
beautiful reports, bubble charts, trend analysis and fed consultants. Most
of the times, poor understanding of the business ecosystem in strategic
perspective results in a plan that is only on the presentations, excel
sheets or board discussion points. Such plans seldom result in concrete
actionable item, that is the point
when there is no defined process, no step by step recipe to follow.

See
Things Differently: Strategy formulation starts with collating all the
intelligence through whatever methodology that suits the company best,
then identifying patterns within the intelligence, up until this point the
approaches are standardized and with the right consultancy it can be done
swiftly and properly. Where most organizations struggle is the phase after
the analysis where they need to define what to do and what not to do, the
lack of innovation, thinking outside the box and coming up with new ideas
that challenge the status quo has been the biggest reason why weak
strategies are formulated. The inability of today's executives to think in
a pioneer way, to see things differently has become the biggest challenge
for corporations. To be innovative, you need to understand the model
behind your organization, your ecosystem and your customers.

The
Strategy Formulation methodology depend a lot on the Strategic Maturity
Level of each specific organization (management team or wider involvement,
as the case may be). It doesn’t mean that frameworks are nonsense, they
have a degree of relevance, but they are so remote that you have to bridge
them to your circumstances, that bridge is what you call a maturity model.

2. Strategy is not just Hindsight, Foresight is more Crucial

Lack of Foresight: From Denning’s
posting: "Although Porter’s conceptual framework could help explain
excess profits in retrospect, it was almost useless in predicting them in
prospect., The strategists theories are 100 percent accurate in hindsight.
Yet, when casting their theories into the future, the strategists as a
group perform abysmally.. The point is not that the strategists lack
clairvoyance; it’s that their theories aren’t really theories— they are
‘just-so’ stories whose only real contribution is to make sense of the
past, not to predict the future.' "

Past is only part of ingredients, not all: Frameworks
have value, but they are also a major roadblock to a successful strategy
based on your organization and its context which can never be represented
fully by the past. The past is part of the ingredients of a successful
strategy, and important ingredient, but it would be a mistake to think
past successes can translate into future ones

The fundamental flaws of an approach
based on pattern analysis and problem recurrence are a) the context
and b) the dynamic view, which are both interrelated. In most cases, if
not all cases, the context of one business is different from another, in
all cases, the dynamic behavior of your organization and consumers will be
different than the ones identified in the past. That is when "luck
and divine inspiration [are] needed" to succeed.

3. The Root Causes of Strategy Failure

Strategies fail because they are
conceived in the rarefied air of hierarchical tops and they lack the
variety to meet and resolve the complexity of the real world. They lack
the depth of understanding that the people who actually deliver value to
customers have about the situation. Thus, the strategy fails because of the lack of visibility. Most people consider strategy to be an enigmatic discrete process that only a leader can truly master it.

It becomes just a rhetorical exercise
SWOT, PEST, 5 Forces, etc; are often used
and documented, and then the executives come up with whatever they had in
mind in the first place. It becomes just a rhetorical exercise, really
expensive and time consuming exercise, that takes a lot of the planning
time and then, the crucial part, formulating the strategy, is rushed or
whatever they had before is just rubber stamped.

A strong cause behind this is the lack
of a strong strategy. When a company has a true strategy that
leverages competences, it has strong fit and makes sense, things usually
happen. Disruptive strategies (or strategic models) have their benefit at
the right time in a company's life. It is probably true that it better
fits the early stages, but can be applied at any point, when the vision
and the opportunities (or threats/challenges) push the company in that
direction.

This question of strategy alignment
with organization design opens up a number of possible root causes for
strategy failure: Is the strategy realistically given the
organization's capabilities? Has the change and implementation effort been
properly sized and planned? Often times the focus is on management systems
and organization structure but culture, talent and other factors are
over-looked.

Super egos are behind many ailments in
the corporate world, and strategy formulation is no exception. the
"ego" and "fear" issue is perhaps a good start to find
out the root causes and to develop a strategy for implementing a strategy
process. Other factors include silo heads and politics.

This outcome has a strong
de-motivation effect on the people in charge of the strategy development.
Since the executive strategy is not analyzed in detail the implementation
of it will be only made partly and the potential outcomes were only a
wishful thought.

Strategy Formulation is often an
analytical exercise too focused on the output contains much of what has
been described within (SWOT, etc.) but lacks good structure to
implement. The last chapter of a formulation exercise should be
Structuring Strategy for Implementation, but most often this is not the
case. That's why what's often formulated is usually never implemented.

Five More Reasons Why Strategy Fail:
for strategy practitioners, some common pitfalls to cause strategy fall,
not because an imperfect framework, but because lack of true strategist,
treat framework as strategy, think strategy planning is annual routine, no
scientific process, as well as do not think execution as part of strategy

4. Strategy Framework like a Map, need continue to be updated

The strategy framework is like a map, a city map
drawn decades ago may not fit in today’s circumstances as small town expands
into the metropolitan area or mega-city. It need be updated to adapt to the new
normal:

a)Market
variation: The new economy is more varied than the old. Businesses are
competing in a multi-speed world in which variation between countries and
sectors has never been greater;

b)Volatility:
Another enduring feature of today’s interconnected market is its volatility.
Some are arguing that as the consumers of the rapid-growth markets play a
bigger role in the global economy, cyclical volatility has inevitably increased.

c)Uncertainty:
In the past 12 months, any global board looking to manage strategic risk will
have increased the weight it attaches to major strategic threats.

d)Knowledge
life cycle is shortened at today's digital era, either frameworks, laws,
principles or best practices, all need be continued to be updated in order to
adapt to the accelerated changes and the new business/economical circumstances.

The missing factor at both academic and corporate ends is corporate
contextual integration of national strategic planning and tactical moves with
EMERGING GLOBAL CONTEXTUAL ENVIRONMENT. The push and pull contextual factors
invite attention to shift in comparative growth patterns in developed and
emerging economies due to rapid in-controllable globalization

Global Contextual Influences visibly and invisibly
dis-configure all the carefully planned elements of a well researched strategic
plan and its implementation process due to external influences on internal
corporate culture, normal practices, tested doing business procedures and
expected outcomes.

Therefore, not only the strategy planning need be cascading, but
also the framework should be updated.

5.Strategy Goes beyond Competition

As Denning put in the article: “The purpose of business is
to add value for customers and ultimately society”. The knowledge of
competitors is an important component of strategy. But it’s not the whole game.
“The essence of strategy, business and business education is not coping with
competition. The purpose of a firm is not just to make money for its
shareholders”.

If strategy is only about competition, why not call this
trick “the discipline of strategy”? Why not announce that a company occupying a
position within a sector that is well protected by structural barriers would
have a “sustainable competitive advantage”?

A good strategy should orchestrate all key factors below to
make it proactive and practical:

People are still strategy master,
the biggest responsibility of any leader is to provide clear direction -
to ensure that the organization has what it takes to be successful in a
future. Super Big Egos' as the cause of failure in effective
strategies

Culture Trumps Strategy: Culture
eats strategy for lunch! If your culture stifles creativity and
innovation, then it's impossible to view your prospective market from
virtually all angles to establish the most effective strategy to
implement. Keep it simple, take constructive criticism as it comes,
streamline your processes, and keep the floor open for fresh ideas. Neither
lose focus on the long-term goal(s) by trying to prove dominance nor make
others feel as if their opinion does not matter.

Other factors can also derail strategy.
The nature of core processes, talent, management systems, and organization
structure along with culture all equate to the "plumbing" of the
organization or the System (large S) design. If your strategic intent is
"A" but your System is plumbed to produce outcome
"B"...outcome B is most likely.

Customer Driven: Many companies
are inner directed and lack the keen real-world insights of companies that
are truly customer-driven so they make other false assumptions about their
SWOT. Trying to develop breakthrough strategy with this myopic view of the
world is impossible.

Execution is a part of good strategy.
Was Monitor’s main problem operations?

6. Five Dimensions of Strategy

Outlining the strategic intent and framing the strategy to
be understandable and implementable is harder than one might think, as very few
people excel at articulating truly leveraging strategy and making it practical
so it can be execute.

Sun Tzu’s “Strategy
without tactics is the slowest path to victory”: even with a clearly
formulated strategy, companies still
fail to deliver appropriate strategy execution, because many companies do not
have a good handle on how to implement and deploy their strategy effectively
and efficiently. They lack a concise and structured strategy implementation
framework and are too focused on organizational silos.

To get stakeholders pulling in the direction of the
strategy, five-dimensions (5"C"s) strategy implementation frameworks need to be
considered.

(1) Consensus – Deploy the strategy
and engage the organization to understand, accept, and stand behind the
strategy. This includes the process of business planning to ensure that
strategic programs have the funding they require.

(2) Calibration – Align the business
processes to support the strategy (this includes extending capabilities which underpin strategy).

If companies have a framework to engage these 5 dimensions
they can swiftly percolate their strategy into appropriate execution.

7.Failure is not Strategy, but Failure tests
Resilience

Failure is not strategy; but we still need some positive thinking
about failure: it is not necessarily "celebrate" failure, but
tolerate, understand and even "promote" failures: a failed strategist
can grow into a true business person, a guru can also become glue to connect
past and future, and a strategy is a shareware, not a shelfware. Paradoxically, success
is failure inside out.

A true strategy is a combination of key factors and
collective effort:

1) Time/effort - developing a good
strategy takes time. You have to understand your own organization, its culture,
its strengths and do so in the context of your competitors and marketplace
trends. This is especially important as your competitors are moving too so you
can't just position to where they are now.

2) Skill - the analysis and holistic
thinking process that is required to deliver a true strategy is often not
sufficiently available.

3). Depth - many strategies are too
high level to allow them to be actioned. A strategic roadmap is an integral
part of a true strategy.

4). Discipline - many organizations
do not have the discipline to hold the organization accountable (and its execs)
to executing against the roadmap while adjusting as needed due to changes in
the environment.

5). Investment/long term thinking -
delivering strategy requires investment in resources and the time to deliver is
often long term. Executives are not often rewarded for long term delivery even
when it is the "right" answer

It is easy to react or to take tactical steps to address individual
opportunities or weaknesses. It is hard to harness the skill and time to do
work in sufficient depth and discipline for a long enough term strategy that will allow
you to execute.

Thursday, November 29, 2012

High performers are more outward-looking and focused on the business dynamic.

In a recently released business report, Ernst & Young has identified four factors that drive Competitive success in today’s global economy: customer reach, operational agility, cost competitiveness and stakeholder confidence. The report also articulates the business new normal facing in business during the last couple of years.

<·Market variation: The new economy is more varied than the old. Businesses are competing in a multi-speed world in which variation between countries and sectors has never been greater;

·Volatility: Another enduring feature of today’s interconnected market is its volatility. Some are arguing that as the consumers of the rapid-growth markets play a bigger role in the global economy, cyclical volatility has inevitably increased.

·Cost pressure: As consumers and governments rein back their expenditure, and as borrowing to buy becomes harder, there is undoubtedly a greater cost consciousness in the wider economy.

·Uncertainty: In the past 12 months, any global board looking to manage strategic risk will have increased the weight it attaches to major strategic threats

Based on such business dynamic, the objective of the report is to find out what it is that high performers are doing differently and set out the lessons that other Businesses must learn if they are to emulate the success.

1. Customer reach

High performers are more outward-looking and focused on the market. They seek the deep understanding of their customers’ demands and expectations and are increasing marketing spend to attain this insight.

They are getting closer to customers’ need, also looking beyond today’s solution. One of the major drivers of change continues to be the impact of technology. Digital technology now allows for both more focused communication and consequent customization than ever before.

They prioritize innovation with focusing on incremental innovation of new products for current customers and current products for new markets.

They embed innovation into every aspect of their organization. High performers adopt the innovation 2.0 -a spiral approach to business model innovation, suggests a loosely structured, circular process that allows companies to connect with the various points of the spiral in different ways and at different times, ultimately reaching an innovative breakthrough.

By adopting innovation 2.0 approaches, the most innovative companies can:

Take advantage of changes in the external environment

Continually revamp their business models to achieve competitive advantage

Innovate to obtain specific business outcomes, such as increased agility, or productivity.

On speed: Being fast is more important than being first. Only one person can ever be first to do something and the record of commercial success for such pioneers is at best mixed. Speed, however, matters for everyone. The speed to market, the speed of change, the speed of operations. These are often the difference between success and failure.

2. Operational agility

High performers respond smartly to change but, more importantly, respond speedily. High performers continue to accelerate while low performers are reaching the limits of their organizational capacity to respond. They adapt flexibly to fast-changing circumstances, by deploying technology, devolving decision-making and enhancing the skills of their workforce

On flexibility: Consistency remains a favorite mantra for management. Consistency facilitates efficiencies in operations and the ability to deliver a shared brand promise across service, sector, and national boundaries.

Taking advantage of technology: Increased use of technology is the most popular way that high performers seek to improve their flexibility. Almost half have taken this step, compared to 37% of low performers.

Based on an earlier report: The DNA of CIO: In the evolution from providing tactical support for the business to becoming a strategic partner, CIOs need to align the priorities of IT to those of the business. CIOs also need to provide wise counsel, turning information into insights when the business is seeking to deploy new technology. At the highest level, CIOs are called upon to help develop the business further -from delivering transformation through to introducing business model innovation.

3. Cost competitiveness

High performers understand what drives cost and what drives value.

They are externally focused on value-creation and opportunity. They place more emphasis on customer segmentation and market analysis.

High performers can be more confident about increasing prices because they understand their customers.

Finding the right balance: They know the difference between eliminating waste and simply cutting cost. Low costs do not automatically translate into high profits. The best-performing companies not only understand what drives cost but, more importantly, understand how that spending creates value.

On price: Profit starts with pricing. The market may “set” the market price, but it doesn’t determine how much value is created or captured by individual companies.

Maximizing efficiencies effectively, high performers take a more strategic view and focus more on efficiency than reducing headcount. High performers also place more emphasis on customer segmentation and market analysis, management attitudes clearly vary between the two groups. Low performers have been far more active in headcount reduction — 43% versus 26%

4. Stakeholder confidence

High performers engage more with stakeholders and unleash their talent,to inform, to explain and to engage: Business is not just about numbers. The way a company communicates its story to its stakeholders has become ever more important. High performers seek to make the value they create visible to their external stakeholders and have significantly increased both the scope and frequency of reporting. In addition, two areas of particular importance relate to sustainability and human capital. Both are complex areas where we might perhaps have expected to see a growing demand for meaningful information.

On external: Making the value visible. Companies today are operating under two opposing pressures. On the one hand, there is much greater scrutiny than ever before. Enhanced governance processes, strengthened regulatory regimes and increasingly demanding shareholders and stakeholders require higher levels of disclosure and compliance than in previous years. Yet, on the other hand, the world of business has never been more complex, as companies compete or collaborate as partners across ever-changing value chains to serve disparate and dynamic market segments. Success comes to those who can bring the value that they create to the attention of their stakeholders.

On internal: Unleashing your talents. The research since the start of the downturn has shown that one of the biggest drivers of differential performance relates to how companies develop and deploy talent. Some 42% of respondents identified talent management as the second most challenging function to manage globally.

High performers are 60% more likely to identify talent as one of the critical factors for determining future competitiveness.

High performers are 50% more likely to see access to talent as a reason to enter rapid-growth markets.

High performers are 43% more likely to be achieving flexibility through devolving decision-making and 30% more likely to be seeking to improve their workforce skills as a result.

Consequently, high performers are 16% more likely to have a concern about labor cost pressure.

On leadership: The two most critical areas of difference concern the ability to lead effectively in an international business environment, where high performers gave a 10% higher weighting, and decisiveness. High-performing organizations are complex and challenging and consequently, call for greater skill in their leadership.

Our results, Supplemental research, and interviews show that companies understand where they need to be in terms of talent, but are struggling to get there. For example, they realize the importance of a global mindset but are unable to implement effective mobility or diversity strategies. And although they recognize the need to obtain the best talent, very few are investing adequately in this effort.

In conclusion: Fundamentally, what distinguishes high performers from others is the recognition that focus, innovation, cost and execution are no longer distinct choices for competitive advantage, but must all co-exist as critical elements when seeking the optimal balance of competitive success. That recognition is based on having a deeper understanding of the drivers of value in their specific markets, the imagination to think differently and the courage to translate those thoughts into action.

The message the report also conveys is that to fill the talent expectations gap, companies will need to change and flatten traditional organizational structures, allow for diversity of cultures and backgrounds, and adopt new and more inclusive leadership styles

Wednesday, November 28, 2012

IT can be a "pioneering" division to walk the talk and lead the change within an organization.

Many IT organizations or enterprise as a whole intend to reinvent their “stale” working environment with 20th culture such as bureaucracy, inertia to change, reward mediocrity, homogeneous leadership & talent team, over-complex business processes, inefficient communication pipelines, etc. However, reinventing organizational structure is not an easy task, it takes both strategic planning and operational alignment to make it work and improve organizational maturity. Below is some collective insight on how to reinvent IT organizational structure and build more creative and productive working environment.

1. Clarify Business Goals and Key Problems need to be solved

The main reason corporations need to create new structure schemes and organizational designs in IT is because business goals are not being met with current design and structure. As IT becomes less about “operate” and more about “generate differentiation for the business,” the link between IT and line-of-business peers can only increase.

Get feedback from business partners on what kind of IT department they want: Try to get involved in board meetings, even if irregularly and partially. All helps to promote IT within the corporation and get an overview what the 'business' wants. You may get a lot of different answers and most of the time, very little insight on what should be the IT department mission or vision. Keep in mind that the IT department's mission should complement and add value to the company's mission. What are the goals of the organization as a whole and therefore what are the subgoals of technology required to achieve them? Once you solved this equation, it will become straight forward how you should organize putting together a set of processes and resources to execute them. You'll be aligned with the organization and best of all you'll get support from your top management to manage change.

A business architecture approach provides the unified structure and context for further analysis: (1). to understand the high-level functions of your IT organization, and (2). to ultimately guide decision making. The output would be an Operating Model, which is a representation of how IT operates across process, organization and technology domains in order to accomplish its function. An operating model describes the way your IT organization does business. Moreover, a gap analysis, skills assessment, efficiency study, workflow analysis, and knowledge of trends and models that work best to meet the business goals are needed before new schemes and designs are created and agreed upon across the business and all shared services.

2. The design Factors to consider when building or restructuring IT

In learning about the drivers behind the design of IT department, if you redesigned IT department, what factors drove the restructuring? How is the structure of your IT department aligned to the organization?

(1) Invite Related Parties to Brainstorm

Designing the organization is a co-responsibility that the related parties such as senior leadership team, business committees, Enterprise Architecture team, HR, finance. etc. need be invited to bring up different perspectives, as any business reinvention effort should have clear business goals, never be delegated from top management since they are the architects of the organization. This only means that at the end you must have organizational-wide understanding and support for the new IT department's organization.

Any IT restructure effort should well align with its IT strategy, and IT strategy is always integral component of overall business strategy, that said, beginning the end in mind: How to design an IT structure to optimize business processes, improve productivity, also encourage employees to be innovative and enforce cross-functional collaboration, and embrace Agile mindset & methodology?

(2) Not just align with organizational culture, but how to cultivate the culture of innovation

Before you could create a new IT structure, you have to make sure it’s not just in alignment with the organizational "culture," but also, help to cultivate the culture of innovation, as that plays a critical role in how you structure your department, services, the underlying rules. IT department is not a silo by itself and it draws its energy from within the organization.

In addition, innovation is the light IT should persistently pursue, shall you create a new team to experiment fresh ideas, or shall you embed such process into existing structure and tuning it to do more/better with less, and do more with innovation

(3) The structure should have a larger business interest forged in via a partnership model.

One of the key principles of assigning responsibilities is to reduce as far as possible (while maintaining good governance) the number of people who have to be involved in each task since all the additional communication/consensus seeking dramatically increase the time required to get even simple tasks done. So there needs to be real delegation of responsibility with well-defined boundaries and clear accountability

Create a culture where IT staff talked regularly to their users rather than just using email. This built up a relationship of trust between IT and the users which meant that when urgent action was needed by users or IT there was the appropriate timely response.

A project department within Corporate IT - you can offer PM skills through the corporation and support (or lead) numerous projects. This way, you can get closer to real 'business' of your corporation and other departments will see that IT is more than just the tech geeks.

(4) Improve IT Maturity and overall Organizational Maturity

And like any other organization design effort, structuring IT group to leverage its core and distinctive competencies is an important consideration. The focus on realignment needs to value addition and speed with proper governance in place. With the way the world is changing, IT organization will always have internal and external resource components. When the structure is created, it needs to reflect both.

How to climb up IT maturity; manage the teams to more focus on strategic & innovative projects & efforts, besides competitive necessary to keep the light on.

Governance, Security and Risk Management: How to embed GRC well into IT strategic decision-making processes & daily business activities, it needs well alignment of people, process, and technology.

(5) IT & Business unit’s KPIs

Take time to review various business unit’s KPIs. Find ways, on how the design will play a calculated factor into the KPIs. Create a spreadsheet into Profit & Loss calculation factors and how to become a true partner: “It could burn or flourish for either party, but it’s’ the most desirable alignment”

Whatever the structure be, there are benefits to treating IT as a Profit Center instead of a typical cost center. You set it up in such a way you could charge resource units back to various BUs. At the end of the year, you are indeed successful if you show that the department is profitable while managing a high QOS.

(6) Allow room for adjustments, keeping it dynamic

As you receive new insight & vision from various business units do the needful adjustments without fear & hesitation. Setup growth opportunities via a dynamic approach based on skill set & experience to meet new demands

Agile Mindset: Amplify Agile methodology to manage IT more holistically, to enforce communication and customer satisfaction.

Innovation Management: Is innovation serendipitous, the innovation capabilities can be cultivated:

(7)Strategic Workforce Planning

Forecast knowledge and skills required to ensure you have the right people, in the right place, at the right time, and for the right cost. Forecasting demand for specific skills and roles helps reduce project delays:

Continue developing relationships between IT and the business to understand emerging needs sooner. Forecasting the skills and roles you need to navigate the changes driven by mobile, cloud, big data, social media, and security trends.

Statistically, 52% of IT professionals who don’t forecast demand for skills state project work is delayed, compared to only 31% for those who do forecast demand for skills.

To get the most value for the least effort, continue to take a demand-oriented approach by default; remember the three “T’s” to keep the planning process organized: targets, tools, and talent:a) Start by identifying your goals in the organization (especially those affected by trends) – targets.b) Then, assess the responsibilities and skills required to achieve those goals – tools.c) Finally, define who you need to have those responsibilities and skills – talent.

3. Define Structural Components

Either organizational pyramid or business lattice, the structure may not be so flat yet, but multi-device support, multichannel communication, and multi-cultural cognizance can all make IT more effective.

The role based structure (Business Planning and Support Branch, Solution Delivery Branch, and IT Service and Operations Management Branch). The idea is to put all the people together to Plan, Build, and Operate into respective branches and work across all technologies. The idea behind this change was to create communities of practice within those areas with people doing similar jobs being able to work together and leverage each other more effectively while focusing on doing things using more repeatable processes.

Case Study: 1) In one instance (a large multi-national), the problem - "a lack of productivity with technology" - turned out to be four regional teams all building the same software because that's what the regional business heads demanded. Re-align responsibilities on a functional rather than a regional basis and eliminated redundant work. 2) In another case, the technologists were "so busy keeping the existing systems running and responding to fire drills" that they couldn't "stay in the zone." So re-aligned to have a help desk, production support, tactical development, and strategic development as separate teams. Hence, rather than ask "what factors drove your restructuring," ask "what are the problems we're having meeting our goals," and go from there.

Virtual TeamMixed with Physical group: The physical team adjustment or reporting structure change may need to consider business culture and varies factors as described above, but social platforms and tools do provide more convenient ways to enforce cross-functional communication, well-mixed business, and IT staff team will help IT talent understand business process and end customer thoroughly, to deliver end-to-end solution, also educate business staff with IT and risk concerns. And the emerging trends such as Agile, DevOps, etc may drive more organizations to do necessary adjustment either in organizational structure or through virtual cross-functional collaboration.

6). Matrix Team to Align IT and BusinessMembers from Business, IT, CFO to approve portfolio and plan new initiatives.

IT Design Practices:

IT design exercise with and decided to create a new Partnership/Account Management function to help IT better align with and seek innovation through combined efforts of IT and users. So macro level a) Support, b) Partnership, and c) Tech Development, which is a merge of applications & infrastructure (since so many systems are a combo of the web, mobile, cloud, and apps these days).

Also, by focusing on outcomes (running all production apps and infrastructure and keeping them all up and available for example) we were looking to improve service levels and responsiveness to clients as everyone had a common goal in mind. The Business Planning and Support Branch was intended to work outwardly with our clients to help them plan for meeting their business objectives while also doing internal IT planning and setting of Enterprise Architecture standards to ensure alignment with the organization's goals. Solution delivery would build to the standards put forth by the Plan area and eventually migrate it to IT Service and Operations Management to keep it up and running. The intention was also to create more cross-functional teams to break down the older technology based silos and increase collaboration.

Thus, any organizational restructure effort may re-invent talent management from micromanagement to macro-management; from monochrome to multi-dimensional visions and multi-faceted team building, and from monitor based to motivational style performance management. IT can be a "pioneering" division to walk the talk and lead the change within organization, because IT is like business's "nervous system," with sense and sensitivity, and usually, IT talent may also be more learning Agile, less political, though, change takes agile mentality, iterative step, and cross-functional communication and support.

Monday, November 26, 2012

We may all understand the fact that EA is a journey, but we
also know stakeholders everywhere want to see results (Value) as soon as it is
initiated / piloted. Can Business (Enterprise)
Architecture deliver value within 90 days? What would that be?

1. Quick Win is in the mind of the expectant not the action of the
executioner.

Can EA deliver value in 90 days? It may depend upon the
expectations of the sponsor, the task in hand, and the culture of the organization.
What architects see as valuable might not necessarily be any value to the CxO
level or anyone else outside EA. However, EA deliverables SHOULD be valuable
outside the EA team so - can it deliver value in 90 days? In the right
circumstances with the right expectations –the answer is “yes”.

The art of the possible and desirable,
the EA must establish the scope and scale of the task and that can only be
done with the buy in of senior staff.For any experienced EA who can study existing business process,
systems, organization etc and map with futuristic business strategy,
Enterprise Architecture, systems etc and then, identify the gaps with
roadmap and recommendations can deliver great value to all stakeholders. The
intent is not to solve the problem / accomplish the objective in 90 days;
it typically takes longer than that. The point is what products of value
for the stakeholders could be produced in that duration to keep them
committed and engaged.

The purpose of Business (Enterprise)
Architecture is to help connect the dot. Often times, there are a lot
of projects/activities going on in an organization. There are a lot of
objects/components/web services being created. However the context for
those projects/activities/objects/components/services is not clear. Within
90 days, EA can create a decent business capability map and use that to
frame these activities/artifacts. Then you can use the capability map to
drive portfolio management, heat map analysis, capability overlap, etc.
And you can demonstrate the value of having Business (Enterprise) Architecture with this quick
win.

1) Start with a key division based
on needs, exec acceptance and urgency..
2). Perform As-Is study at the same time understood the business value and
future business goal

3).Gap analysis and find a solution

For example, a CIO might be interested in a summary of the
IT ROI and TCO - as a business
case for change - Regardless of the analysis and design, architecture purity,
and numerous spreadsheets of proven tangible and intangible benefits, an
abstraction is created to convey to the business the value of change. Why
should the business invest in what you are proposing?

In addition, it is not all about IT. There are some
situations when a business solution does not require technology change and as
an enterprise or solution architect you should (in time) be able to recognize
them.

2. The EA artifacts created within 90 days may provide more value to the EA
team

Though what has been described time and time again is the
value of delivering EA artifacts within 90 days as 'business value'! This
highlights a big EA problem at the moment in that architects perception of
value is the same as the business. The EA artifacts created in most cases
within 90 days provide more value to the EA team than the business. What the
business see as value are the final results and not the beginnings of an
analysis with or without proposed recommendations. Not all EA projects take the
same path and there are significant variables that alter its course - thinking
otherwise highlights a lack of diverse experience within EA activities.

For a new established EA team, some first 90 days activities
may include:

1)Organize EA team, create EA site

2)Clear statement of intent of the architecture
(Architecture Vision - short version)

3. Low Hanging Fruit Gives EA Management Validation

Within 90 days in pretty much any organization an
experienced business (enterprise) architect could almost guarantee to identify
and present one or more valuable improvements and innovations. Whether the
organization itself can be encouraged to understand their value or is prepared
to go through the pain or cost of the required change is another matter. Talking
about value, from management perspective, we may also think about metrics, are
your EA metrics based on budget, on schedule or on value? Even value is a
multi-dimensional concept, how do you measure such quick win via quality value,
economical value, utility or different shareholder's perceptive value?

Therefore, EA value can be derived in multiple ways - it does not have to be
realized through delivering value to the enterprise customer. Reduced cost of
implementing change could be value. Reduced cost of planning change could be
value. Avoided risk through better quality contract could be value. There is a
full spectrum the value is derived.

Focus on core value chain activities and search for the
"low-hanging fruit" where EA can be used for assessing a serious
business challenge or problem, then used for defining the solution. Business
problems in the production chain get a lot of management attention. Thus, crafting
a reasonable solution with EA will give EA a lot of management validation and
provide you with credibility, which then can be carried forward into the next
EA engagement that might need more than 90 days to complete.

More specifically, from management perspective, EA can be
used as:

1). Communication
Tool: so as long as executives & managers start using EA to communicate
more concisely and effectively cross-enterprise level, then EA is valuable. Or
put another way... unless there is a tight connection to daily operational
details, architecture is little more than an intellectual hand-waving exercise.
Within 90 days, an EA should come up with an one page architecture, covering
business and technology.

2). Knowledge Management Tool:
information is now the precious asset in enterprise, but information is not
knowledge yet, the breadth and depth of knowledge EA help manage can also
benefit business even on daily basis; . This is an ongoing effort and will
never be done. So defining the top 30 files and 30 reports with unique keys is
a deliverable that will yield results within 90 days.

3). PPM Management Tool: overall,
project management success rate is low, if EA can help prioritize, optimize
project portfolio, then both quick win and long term value are tangible.

4). Risk/Governance Tool: Either at
strategic, logic or tactical level, business faces risk more frequently than
ever, recognize pattern or loophole, to keep business resilient is another
value point for EA to reach.

EA also has potential to contribute to three major business
challenges, in conjunction with other tools and approaches:

1). living in the turbulence of the external environment. EA can help an
organization to set strategy, keep appropriate control, develop sufficient resilience
while remaining agile, identify and manage strategic risk.

2). Managing the internal complexity of
the organization. EA can help an organization to model and so understand
itself, define and deliver decision-taking information support, reduce information
overload & complexity, produce a pipeline of core capabilities, focus and
manage innovation, plan and deliver technology deployment, plan and manage
change

3). Manage the boundary between the
organization and the external world. EA can help an organization understand
and manage globalization, manage its supply chains, influence / comply with
relevant regulation, manage its partnerships, assess and execute M&A

Very often the reason an organization hasn't already recognized and implemented
such improvements is because its culture or methods act as a kind of glass
ceiling preventing it from doing so. This applies even when the improvement is
apparently a quick fix. Again that glass ceiling puts them tantalizingly
out of reach. Moreover, 'architectural' improvements are by definition more
than a lick of paint, so are going to require more fundamental, invasive
changes, with larger, longer term payback

In conclusion: Quick win builds trust and trust builds
advocacy. However, EA, as an abstraction, is created to convey the business
value of change. Overemphasizing on short term result may stifle EA real value.
And EA's main purpose is to bridge strategy and execution, it’s a journey, not a
sprint.

It is the framework which changes with each new technology
and not just the picture within the frame. --Marshall
McLuhan

All companies are quite different and CIOs may also have
different understandings and experience of ITIL. Some think ITIL provides a
tremendous amount of benefits to many global companies; while there are also
many companies fail at its use and others using it as an excuse to slow down
the speed of business. Is it one of those "old school" frameworks
from the era when IT focused on risk mitigation and process integrity rather
than customer satisfaction and business success? or does ITIL still add value
in ITSM at digital speed?

Some CIOs are abandoning ITIL, while others use it
religiously. Is it still appropriate and why?

1. Common Understanding of ITIL is
vital to its Value Proposition in ITSM

1)ITSL is a
framework, not gospel. The elasticity and resiliency of any frame works
starts with an understanding that we are trying to provide a foundation for
continued success . . . the goal should not be the construction of a monolithic
standard that is incapable of adapting to the changing needs.

2)ITIL is
Recipe: Don't eat the recipe; eat what you make from it! ITIL doesn't
give you all the answers for one thing. It's more a book of recopies than the
finished article. It was intentionally
designed to be a guideline and not the gospel. As such, it is expected to
be tailored to meet the requirements of the organization.

3)ITIL is
basically a detailed analysis of all the aspects of operations and
recommendations for best practice. However, you can't just implement ITIL
as written; you have to use it as a guide for the development of operational
procedures that suit your own operations. ITIL clearly doesn't develop and
adapt as quickly as some organizations change and therefore,operational managers have to use their brains
to adapt to satisfy the needs of the organization in which they work.

4)ITIL is a
set of best practices and a framework, and Best Practice is not a one-off
implementation, nor is it self-sustaining. As Version 3 of ITIL underlines,
there should be an iterative and
interactive lifecycle approach to the various processes. Best Practice is an
ongoing commitment, and not a time-restricted project.

5)ITIL is a
guideline - not a standard. Weaving it into the fabric of compliance as a
standard will continue to cause heartburn. The more we change, the more we
often stay the same . . . in so many respects.

2.Top Ten Reasons Why ITIL
fails or Some Move Away from it

1)The #1
reason for anyone to move away from it, seems to be lack of flexibility and
the CIO's misconception that it adds more time to implementations, modernizations,
and transformations

2)ITIL is
not to blame. The implementation of ITIL is to blame. To be efficient, ITIL
should never be a burden to the operational staff, but a toolbox to work
efficiently. The administrative burden should be taken by the support system.
ITIL is to frequently hijacked by administrative forces and turned into a
nightmare of controlling layers

3)It takes
too long for ITIL to keep up with trends and new technologies requiring
different models, such as Cloud and other new architectures. They also feel it
has required them to spend too much time on operational aspects.

4)Change
Management Fails: The biggest failure in many organizations and their
implementation of ITIL or other methodology is their strict adherence to the methodology without any consideration
for adapting the methodology to their culture, business, technical
infrastructure, operations, or even the circumstances of a given project.

5)Too Much
IT Focus, not Enough Business Focus: TIL is still relevant, but sometimes organizations
spend so long focusing on implementing the processes that they forget about
basics - focusing on discovering what is the cause of the problem and constant
improvement.

6)Some
organizations treat ITIL as an end in itself rather than a tool to help IT
efficiently and effectively deliver the services the organization needs to
achieve its overall goals. It is also essential to take into account the skills
and experience of the staff that will operate the process when designing it so
that it doesn't become overly prescriptive and takes advantage of their
professional expertise. ITIL can help you get there, but it doesn’t have to be
the end all. 100% adherence to any methodology is not necessarily a good thing.

7)Misunderstand
that it is not mandatory in its entirety and that it is one of several
tools and guidelines they can use. There is no reason why you can’t
take the best of ITIL, the parts that work well in your company culture, and
tailor the rest. Infrastructure and operations benefit greatly from
well-designed, air-tight processes that can be automated. The goal should be to right-size ITIL for your organization without
breaking the bank.

8)People
take "it" too seriously. The key is to look for improvement
opportunities to solve problems or increase value, not to simply pass some
process audit and sending people on training is never the silver bullet.
Otherwise ITIL just becomes the flavor of the day until the next fad comes
along. Or when you start to expect
it to be an all encompassing solution for IT is when you start to get into
trouble. This is where you need to start to embrace other frameworks and
even bring in your own creativity to be successful in the delivery of IT
services.

9)Some believe ITIL is still relevant but it
is costly, and that may explain why some are abandoning it. Efficiency
should not come at all cost. The reason
for failure is a mismatch of expectations and failure to deliver on what was
perceived to be the outcome.

10)TIL turns to be an inflexible doctrine that
drags down the enterprise. Failed ITIL initiatives lies not with the
service lifecycle management framework, but rather with the application of that
framework. Fundamental, conceptual understanding of continuous improvement is
lacking from many implementations.

3.Define the Right Set of Questions
to Evaluate ITIL Objectively

ITIL gains some reputation, also
cause confusions or even resource waste, if any comprehensive surveys are taken
to ask ITIL users, what is the right set of questions shall you ask:

1) IT Maturity: on average, do ITIL
users have significant higher IT maturity, or not so much difference?

2) Innovation: What matters now,
innovation, most of businesses now also think IT as their innovation engine,
so, do ITIL users have better capabilities to be innovate or less? Why.

3) Value: What are the key values it
can bring to IT or business as a whole? How about value/cost ratio? How about
User feedback and overall customer experience? How about short term win vs.
Long term Perspective?

4) Agile: Is Agile complimentary to ITIL? Or does ITIL
become the barrier for company to adopt Agile. Although Agile came out of the
software development world, can things like kanban and scrum be used
effectively by infrastructure and support teams?

5) Change: Can ITIL adapt to change? Is ITIL still an effective
framework to embrace IT/Business Changes with right governance discipline? Or is
ITIL an “old school framework” to be very rigid applying controls or stifle
changes?

6)Simplicity:
Does ITIL add the un-necessary restrictions on users/systems? Or It has the
necessary design complexity to enforce service delivery?

4. ITIL Tips for CIOs

ITIL is not one Size fits All: TIL
and other processes, can only work if tailored specifically to the
environment a CIO finds him/herself in. What works for one organization
may not work for another, even if implemented by the best ITIL
practitioner in the business; and, sometimes the CIO may rightly take the
decision that a bespoke process is what's needed rather than a widely
adopted one such as ITIL.

Cloud Transformation: Which role
ITIL can play in such transformation? With more and more companies
adopting cloud, the opportunity has never been greater for IT to transform
into a service-oriented organization and grow the business it serves.
According to IDG research,
more than one third of current IT budgets are allocated to cloud
solutions. However, in their haste to adopt the cloud, CIOs may be missing
an opportunity: the chance to use this transition to reshape IT. Key to
success is IT transformation to services broker. With a service lifecycle
approach, organizations can increase the velocity of IT service delivery
and operate efficiently, without sacrificing governance.

CIO must see what they can get out of
ITIL and at the same time what is the best for the organization to adopt. No
one is forcing anyone rather it is just a tool which help you to be more
vigilant and smart. CIOs must see the ROI using this tool for business in
terms of value addition, controls, business benefits etc.

BUILDING TRUST THROUGH TRANSPARENCY: In
many organizations, IT needs to gain the trust of the business. Research
to measure business perception of IT across many companies clearly
demonstrates that, while IT is seen as an important partner, it receives
low ratings in areas such as budget effectiveness, business understanding,
and communication, any framework should enforce such transparency.

CIOs should have in-depth understanding
of ITIL at strategic Level: most CIOs, including those who actively
champion ITSM, have little more than superficial understanding of the ITIL,
or the implications of adopting ITSM processes. Worse, they rarely regard
the effort as a true organizational transformation effort touching every
aspect of the IT organization, and many aspects of the enterprise
organization.

Be pragmatic not dogmatic. An
organization has to balance the time it spends on process (ITIL) and the
time it spends on products/deliverables. If the ITIL implementation became
such a focus that the organization loses traction on deliverables, then it
a re-balancing would be in order.

Embrace Agile: Agile Scrum and IT
management, many organizations use agile as mainstream software
development methodology, and even as management discipline, that said,
what is needed from effective framework is the governance process also
being agile enough to adapt to changes

Social Collaboration: The emerging
ITSM solutions may add social collaboration in service management to build
up a better democratic environment, such as DevOps to converge IT development &
operation for improving agility, the CIO’s evaluation for new tools may
also include how the framework support the new trend and deliver
innovative IT services & solutions.

Value Driven Questions being asked by
CIOs: 'how much of this
particular process or method should I implement in this role to get the
business to where it needs to be?'.
The answer to that question should never be based on the technology in
use in the business, rather on the particular needs of the business -
including taking into account where it currently sits with regards to the good
practices proposed by ITIL and other methods out there.

As a reference framework, ITIL is not a
"one size fits all" solution. CIOs should be innovators,
not lemmings. Use what makes sense, apply it in a way that considers
what's unique about your organization but without abandoning the spirit of
the framework.

IT becomes business catalyst to build competitive uniqueness,
how do you differentiate yourself from other IT organizations, besides
standardization, there're optimization and innovation, IT is shaping your
business, but framework is not strategy. Do not let ITIL or any other framework
ruin your common sense. Take it as a guideline but put your own flavors and
ingredients. Select a mix of framework, toolset and process architectures to
improve flexibility and agility for speed of business change, doing better with
less, and doing more with innovation.